1340 Strategic Compensation

Course Author: Dr. Parbudyal Singh; Professor of Human Resource Management; Director,
School of Human Resource Management; York University

Course Instructor: Dr. Parbudyal Singh

Required Text: Long, Richard J., Singh, Parbudyal (2021) Strategic Compensation in Canada, 7th
Edition, Nelson.

Brief Description: This course provides the student with an understanding of the objectives of a
compensation program; the process and techniques of wage and salary determination; issues
and problems in incentive systems; benefits and services, and the management of these
programs.

Course Duration 12 – 14 weeks:

It is expected that students will progress through approximately one unit per week and spend
about 3 hours per unit accessing the multimedia with interactive questions, working with self-
help quizzes and participating in the discussion boards. Additional time will be required for the
readings, midterm paper and final examination.

Learning Objectives:

At the end of this course, students should be able to:

 Understand the strategic planning process and its link to an organization’s

compensation systems
 Understand the important of horizontal and vertical “fit” among the compensation
systems and practices and other management systems within an organization
 Analyze an organization to determine the most appropriate managerial and
compensation strategy for that organization to adopt
 Describe the objectives of a compensation system
 Explain key aspects of compensation strategy
 Explain the key theories that may be used to explain the effects of the compensation
system on human behavior in organizations
 Explain the key components of an organization reward system
 Develop appropriate base pay, incentives/performance-based pay and benefits for
organizations
 Discuss the empirical research on various aspects of compensation, including the effects
of variable pay systems
  Critically evaluate the role and effects of compensation systems
 Identify and explain the key criteria for evaluating the success of a compensation system
 Understand how to implement and manage a strategic compensation system

Multimedia Course Contents and Readings:

Unit 1: Introduction to strategic compensation

 Module One: An explanation of compensation concepts

 Module Two: The goals and objectives of compensation systems

 Module Three: The context of compensation management

Readings: Chapter 1

Unit 2: A strategic framework for compensation

 Module One: The concept of fit; contingency theory; organizations as systems; a

strategic model

 Module Two: Managerial strategies and reward systems

 Module Three: Trends in managerial and compensation strategies and systems

Readings: Chapter 2

Unit 3: A behavioural framework for compensation

 Module One: Addressing reward problems appropriately

 Module Two: Attitudes and behaviours associated with reward outcomes

 Module Three: Theoretical explanations of compensation-behaviour relationship

Module Four: Implications/lessons for management

Readings: Chapter 3
Unit 4: Components of compensation strategy - Overview

 Module One: Compensation components: base pay, performance pay and indirect pay

 Module Two: Base pay methods – job evaluations, market pricing, skill-based pay,
competency-

 based pay; advantages and disadvantages of each method

 Module Three: Applicability of each method in various contexts

Readings: Chapter 4

Unit 5: Overview of performance pay choices – concepts and context

 Module One: Individual performance pay: piece rates, sales commissions, merit pay and
special-purpose incentives

 Module Two: Group performance pay: gain-sharing and goal-sharing plans

 Module Three: Organization performance plans: profit sharing and employee stock
options

 Module Four: Applicability of performance pay within specific contexts

Readings: Chapter 5

Unit 6: Formulating the reward and compensation strategy

 Module One: Constraints on compensation strategy: legislation, labour market,

product/service market and financial

 Module Two: A step-by-step process in compensation strategy formulation

 Module Three: Compensation strategy for special employee groups: contingent workers,
executives, expatriates and foreign employees

Readings: Chapter 6
Unit 7: A Detailed Examination of Job Evaluations

 Module One: The role of job analysis

 Module Two: Job evaluation methods: ranking, factor comparisons, point method (brief)

 Module Three: Conducting and managing the job evaluation process

 Module Four: Conforming to pay equity requirements

Readings: Chapter 7

Unit 8: A detailed discussion of the point method job evaluation – focus on design

 Module One: A step-by-step explanation of the point method: identifying compensable

factors, scaling the factors, weighting the factors, etc.

 Module Two: possible pitfalls of the point method

 Module Three: Determining base pay structure: pay grades and ranges; movement
through the range

Readings: Chapter 8

Unit 9: Market evaluation

 Module One: Understanding labour markets; defining the organization’s labour market

 Module Two: Sources of compensation data

 Module Three: Conducting compensation surveys

 Module Four: Analyzing and interpreting survey data

Readings: Chapter 9

Unit 10: Evaluating individuals

 Module One: Overview of performance appraisals

 Module Two: Performance management

  Module Three: Linking pay to performance appraisals

 Module Four: Issues in determining an effective merit pay system

Readings: Chapter 10

Unit 11: Designing performance pay plans

 Module One: Gain-sharing plans and goal-sharing plans

 Module Two: Profit-sharing plans

 Module Three: Employee stock options

 Module Four: Nonmonetary reward systems

Readings: Chapter 11

Unit 12: Designing indirect pay plans

 Module One: Types of employee benefits and services

 Module Two: Fixed versus flexible-benefit systems

 Module Three: Designing the benefit system

Readings: Chapter 12

Unit 13: Activating and maintaining an effective compensation system

 Module One: Preparing for implementation and developing the implementation plan

 Module Two: Implementing the compensation system

 Module Three: Communicating and evaluating the compensation system

 Module Four: Monitoring and adapting the system

Readings: Chapter 13
Learning Aids: Interactive questions within the multimedia lecture streams. Self help quiz
attached to each unit of the course.

Participation: Discussion board moderated and graded by the instructor. Students are required
to post at least 3 substantial submissions (400 words or more) during the course on assigned
questions (topical and case study based) that demonstrate knowledge and skills congruent with
the Learning Objectives. There will be instructor feedback on all submissions.

There will also be a General Discussion Board moderated by the instructor in which questions
can be asked on any course topic.

Midterm Paper: A midterm paper of approximately 1500 words to be submitted online

approximately 6 weeks after the start of the course. The instructor shall grade and comment on
each paper, which shall be returned to the student.

Final Examination: Proctored, opened book, online examination consisting of essay question(s).
Any part of the entire course content may be examined. Government issued photo
identification will be required to verify the student’s identity.

Grade Weightings of Course Components:

Participation in Discussion Board: Weighting 10%

Midterm Paper: Weighting 35%

Final Examination: Weighting 55%: (It is required to pass the final examination with a grade of
at least 65% in order to pass the course, regardless of grades earned in other components.)

Passing Grade for the Course: 65%